Rishi Sunak has said European car manufacturers have backed his call for the EU to delay implementing a post-Brexit tariff on car parts for electric vehicles.
Stellantis, which owns Vauxhall, Peugeot, Citroen, and Fiat, said the changescould force it and others to quit the UK, the prime minister said the concerns were not just in Britain.
Under new rules, tariffs will be imposed from January on how much of an electric car much be made in the UK or EU. The tax will apply when less than 45 per cent of the value of an EV, and less than 60 per cent of its battery, is made within the bloc.
Mr Sunak said there is not currently sufficient battery-making potential in the UK or the EU for these figures to be reached by January.
Mr Sunak told ITV on Thursday: “It’s something car manufacturers across Europe, and not just in the UK, have raised as a concern.
“As a result of that we are engaged in a dialogue with the EU as to how we might address those concerns.”
The prime minister did not disclose which European manufacturers had expressed concern.
Stellantis said on Wednesday it would be “unable to meet these rules of origin” especially when increased raw material and energy costs are factored in.
Kemi Badenoch, the business secretary, raised the issue with her Brussels counterpart and held a pre-arranged meeting with Stellantis chiefs on Wednesday.
She raised the motor industry’s concerns about the TCA with chancellor Jeremy Hunt and foreign secretary James Cleverly, according to Whitehall sources.
Mr Sunak added that he would be meeting with the chief executive of Nissan, as well as other Japanese firms while on his G7 visit to the country, after the manufacturer committed to making cars in the northeast of England.
“I am pleased that we are announcing £18 billion of new investment into the UK,” the prime minister continued.
“That is going to create jobs at home and Japan is a significant investor in the UK and I know that will continue.”
The meeting follows Nissan’s former chief Andy Palmer saying it was “impossible to meet local content rules unless you source your battery within the UK or EU” but the “supply chain at the moment isn’t there” in Britain.
Labour leader Sir Keir Starmer said in response to the car firms’ complaints that “we need a better Brexit deal” with the EU to ensure firms can continue to operate in the UK.
“Of course, we want a closer trading relationship, we absolutely do,” he said. “We want to ensure that Vauxhall and many others not just survive in this country but thrive … so yes we need a better Brexit deal. We will make Brexit work.”
No 10 said problems relating to the British car industry over a Brexit deal deadline can be resolved “within” the Trade and Co-operation Agreement (TCA), rather than open up a renegotiation.
“We continue to want to work closely with the EU to find a solution to this problem,” said a spokesman for Rishi Sunak. “We think it can be resolved within the TCA, and we want to continue to take that work forward.”
